As meme coin fever breaks out across Solana, SOL price has shot up back above $200, as retail investors scrambling to buy into the 4th biggest cryptocurrency and try their luck on DEX markets.
Over the past week, Solana has experienced an impressive 37.77% surge, while in the same timeframe, Ethereum (ETH) and Bitcoin (BTC) have dipped by -11.89% and -4.92% respectively.
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When Solana’s biggest supporter, FTX founder Sam Bankman-Fried, was arrested in December 2022, SOL traded for $10.
Now, on March 18, it has crossed $200 with a $90 million market cap for the third time in its history.
So what’s going on? Why is SOL pumping and outperforming the market?
Why is Solana (SOL) Pumping and Outperforming Crypto Market?
Solana doesn’t work like Bitcoin or Ethereum, it uses a consensus mechanism called “Proof of History.” As Satoshi Nakamoto, the creator of Bitcoin, found out, it’s very difficult to tell time within a blockchain.
In a decentralized system, you cannot rely on an external clock that could be subject to manipulation or failure – the blockchain needs to run independently.
At its core, Proof of History allows nodes (the individuals verifying the network) to create their own timestamps and quickly send them to other nodes.
POH combines the best aspects of Proof of Stake and Proof of Work. This has allowed Solana to handle 65,000 transactions per second with 400 millisecond block times. The theoretical limit is 710,000 transactions per second which is 30X that of billion-dollar financial giant Visa.
Thanks to its high speeds and low fees, Solana has attracted more active users than any other blockchain. Furthermore, over 2,500 monthly active developers contribute to open-source repositories within its developer ecosystem. Price analysts, like Real Vision Finance CEO Raoul Pal, say this is where Solana’s long-term value comes from.
Next aim for SOL is the all time high vs BTC, having just broken its all time high vs ETH… pic.twitter.com/7p1xFJVQdU
— Raoul Pal (@RaoulGMI) March 18, 2024
As for Solana’s recent price action, the significant gains observed in the last 24 hours correspond to the hype meme coins, with high-octane price moves in Solana meme coins becoming a regular fixture of the past few weeks after pack leader Dogwhatif (WIF) skyrocketed.
This has driven a huge wave of new activity onto Solana, with fresh retail capital rushing into the ecosystem as FOMO traders scramble to catch the next big meme coin.
Meme Coin’s Fuel Solana’s Rise: What is the Next Solana ATH?
As meme coins continue to fuel Solana’s impressive rise, the question on everyone’s minds is what is the next Solana ATH.
After all, a rapid ascent in price, backed by strong fundamentals is unlikely to slow down at the beginning of a bull run.
With traders looking north to the previous all-time high of $259.96, it seems likely that SOL will hit a new ATH in the coming weeks – likely alongside Ethereum.
A new all-time high would likely target the psychological price level around $275, although in an aggressive bull run rally, this is likely to form more than a mere stopping point.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
